We will analyze changes in chronic disability, institutionalization, and mortality using the National Long Term Care Surveys (NLTCS) and linked Medicare mortality and Medicaid files to evaluate active, and disabled life expectancy trends for age, gender, race, and cohort. We will examine how active life expectancy (ALE) changes correlate with mortality change by age, race, and sex and how degenerative conditions (e.g., osteoarthritis, osteoporosis (and hip and spinal fracture) cognitive loss, congestive heart failure, diabetes) affect ALE both in the total U.S. elderly population and by gender, age, and cohort. We will focus on the "oldest-old" (85+) who have the highest institutionalization and disability rates and who recently (1988-1991) showed large mortality declines (8.6%). This research expands on findings about disability and ALE changes in the U.S. elderly and oldest-old populations made in the prior project term. Primary data are the 1982, 1984, 1989 and 1993 NLTCS and linked Medicare and Medicaid service records. We will examine the service implications of ALE using Medicare data linked to individual survey records for 1982 to 1992. This follow-up will be extended for the 1993 NLTCS as new Medicare data is available. We have complete mortality follow-up for all NLTCS samples (nondisabled as well as disabled and institutionalized persons) for 1982 to 1991. In addition, we linked persons to Medicaid service records in HCFA's Medicaid Statistical Information System for 1989 to 1991 for 26 states currently covered (coverage is being expanded). To examine ALE one must examine multiple dimensions of disability and the severity of impairment on each. This is done with a procedure, the Grade of Membership (GoM) analysis, whose properties have been tested in multiple data sets. Using GoM we can identify multiple dimensions of disability, variation in their severity, and show their relation to a.) chronic degenerative conditions causing disability and b.) socio-economic status (e.g., income, education, marital status, living arrangements). Thus, our goal is to go beyond describing ALE to understanding the mechanisms causing it to change with age. To evaluate the component processes of ALE change, cohort, marital status, and socio-economic characteristics are assessed. This is important because the cohorts now approaching age 65 have increasing socio-economic resources and education. This may have produced the decline in chronic disability prevalence observed between 1984 to 1989. Thus, we will not only describe ALE changes over time in the U.S. 65+ and 85+ populations, but identify and evaluate a.) processes governing disability change, b.) socio-economic and medical correlates of ALE and its change over time and age, and c.) effects of ALE changes on health service use (i.e., Medicare Part A, Part B; Medicaid; out-of-pocket; informal care use) and costs of illness.